City Council leaders tackle issue of exempting nonprofits from taxes

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RICHMOND, Va. (WTVR)— At Monday’s council meeting, city leaders tackled the issue of exempting nonprofit groups across the city and the conversation became a bit heated.

Without ever seeing a film, most Richmonders can grasp the beauty of the historic Byrd Theater.

Some Richmond City leaders agree it should be protected and the nonprofit exempt from paying city property taxes.

"It's outrageous and it's penny wise and pound foolish," said councilman Marty Jewell, who supports giving the exemptions. 

For the past several years there has been a moratorium of city issued tax exemptions for nonprofits.

It was after the Byrd Theater fell behind on its taxes earlier that the city decided to lift the moratorium, allowing other nonprofits to apply for the exemption.

Several members of council feel the groups deserve a break.

"There are a lot of nonprofits that are struggling in this God awful economy," said Jewell. 

A small committee reviewed the applications and determined which nonprofits were qualified for exemption.

It left about two dozen entities on the table that added up to about $160,000 dollars in annual property taxes for the city.

About a dozen of their proposals all of council agreed with, but the remaining applications were hashed out at the meeting.  Several leaders expressed that without the services provided by the nonprofits, the city would be picking up the bill to provide them.

"I think it's a small price to pay to receive such benefit to our community," said Councilman Bruce Tyler. 

Several other members of council expressed a need to put the moratorium back in place and stop taking applications for exemptions. They argued that the review process isn’t refined enough and it’s hard for city leaders to apply the exemptions fairly without an equitable system in place to determine which nonprofits are worthy of exemption and which ones are not.

"Who is doing quote on quote good work, who might not be and the various causes, it’s hard to tell,” said councilman Chris Hilbert.

Hilbert expressed concern about the possibility of a large volume of applications coming in to the city, which would eventually translate to a big loss of revenue.

"I suspect that we can expect a lot more of this in the next year," said Hilbert.

At the end of the evening, just fewer than two dozen nonprofits got their tax exemption. Hilbert plans to reintroduce the moratorium on exemptions at an upcoming council meeting.